2. I noticed a discrepancy gap on the back drivers side wheel vs the other one - one is inwards more than the other ?! Is this normal?
Will measure when the rain stops for more perspective; only have the ad pics.

3. So that's why i am interested in spacers. I want on the back to have the wheels flush and put wider tires on the existing rims but within reason.
So spacers plus 245s on the back on the current rims, would be an ideal setup that will not have negative effects on handling etc?

I have seen threads before that mention a slight difference left-to-right, but that does seem quite a lot. I'd remove both rear wheels and take some measurements on the trailing arms to see if one may be bent. Also check the springs are in good order and one isn't broken, which would drop the car on one side and change the camber.

Also, for ease, I'd try and put image tags in when you use photos so they appear in the thread!

Take the wheels off and check the offsets and widths as printed on the inside of the rims. BMW have staggered offset on some cars and it's not unheard of for sets to get mixed up. Rim width is measured on the inside of the rim with the tyre off. Take each wheel off and see what each wheel is marked as.

I forgot to mention that your car will have a Torsen (TORque SENsing) type of LSD. These units are a far better type for road driving than the locking-cloutch type, but they reduce the ease with which the car can be drifted. They operate by a clever gear train - see Wikipedia for details - which gives smooth and progressive operation.

Testing a Torsen LSD requires a slippery road, but some people claim a dry road can be used if the clutch is dropped, producing two lines of rubber if the LSD action splits torue equally. As with ABS and ASC, it is never wise to provoke a safety system such as this, and if the car drives round tight bends without problems you can assume it is OK.

Yes of course, for now i want to focus to have the car in shape and not force it to find out that way if it has the lsd or not. From what i remember it should have a tag on the outside with the ratio nr and 'S' on it to pin point that it is the LSD present. This is what i know from the E34s.

Anyway i made a list for mechanic to find all the answers and will comeback to update the topic.

One way to check which diff you have and not lay down rubber or other questionable driving maneuver is to jack the car up, remove the diff filler plug and insert an inspection camera to see what your diff internals look like.